Let me begin by expressing my sincere appreciation for your willingness, and that of Minister Freeland and the government, to sustain open and frank dialogue regarding the Trans-Pacific Partnership negotiated under the previous administration.
It is a deeply flawed agreement, and our view is that the costs of the TPP outweigh, of course, the limited benefits that might arise from the deal.
Proponents of the deal only expect a boost to Canadian GDP of about 0.5%, and that's over 10 years and down the road. That's about as much as the previous administration promised to pay the dairy industry for compensation for TPP losses. This leaves nothing to cover the costs to the auto sector and other sectors.
A key study from Tufts University predicts that workers in all of the 12 TPP countries would lose out because the TPP will increase income inequality within those countries.
This flawed agreement also is about protecting multinational corporations' rights. It does nothing to help workers or the environment.
The two sectors with the most to lose are the auto industry and the dairy sector. But I also want to touch on our concerns with the provisions on public service, labour mobility, rising drug costs, and the investor-state and environmental regulations.
The auto sector is centrally important to Canada's research and development, high value-added production, and manufacturing exports. In 2014, approximately 40,000 Canadians worked in motor vehicle manufacturing in our country, and another 70,000 in the parts manufacturing. A five year phase-out of tariffs on Canadian imports of Japanese vehicles will quickly eliminate the incentive to manufacture in Canada, and it will encourage Japanese assemblers to import more vehicles into our country. Unifor, our major industrial union, has estimated TPP will lead to at least 20,000 job losses in the auto sector alone.
The Canadian dairy sector provides high quality, locally produced food while supporting small family farms and rural communities in our country. Under the TPP agreement, foreign dairy producers will be able to access an additional 3.25% of Canada's 2016 dairy milk production. This comes at a time when the dairy industry is already under considerable stress. Two hundred and fifty million litres of milk and subsequent production jobs are at risk annually.
The TPP makes unprecedented changes to Canada's policy for the use of temporary workers. Under the TPP, there is no limit to the number of temporary workers who can get temporary work permits, and no ability to set economic needs tests on specific sectors. There is also no mechanism to enforce fair labour rights for these workers. This will immediately impact on infrastructure projects and workers in the building trades.
We have many concerns with the model of investor-state dispute settlement. By now, I think the problems with this model of dispute settlement are well known: the unaccountable and ad hoc nature of the arbitral panels, their expansive definition of what constitutes an investment, the fact that they do not operate in subsidiarity to national court systems but above them. And then there's the apparent lack of deference to the prerogatives of governments, or even national jurisprudence on any given issue.
The TPP chapter on public services locks in the current level of privatization with so-called ratchet and standstill clauses. This makes it more difficult for governments to introduce new public services such as pharmacare or child care without subjecting themselves to ISDS claims.
Canada already has the second highest per capita drug costs in the world. The TPP will further constrain efforts to reform pharmaceutical purchasing provisions within Canada.
The TPP also contains broad prohibitions on economic and environmental performance requirements, such as requiring technology transfer or local sourcing to foster green industry. Such restrictions will serve as a chill on governments contemplating steps required to make the transition toward a low-carbon and climate-resilient economy.
It is time to come back to more reasonable forms of investor protection, protections that should be subsidiary to national jurisprudence, should privilege state-to-state settlement, and shall emphasize investors' responsibilities just as much as the protection of their assets.
In conclusion, we have called on the federal government to conduct its own impact analysis of the TPP, and to make this analysis public so all Canadians can learn what the impact would be.
In closing, I want to ask the committee today if you have requested a thorough study or analysis by Global Affairs Canada. If you have not, I would like to recommend that you do so. Given the high economic and political stakes, Canada deserves no less than a full and substantive discussion on the potential consequences of this draft agreement.
I want to thank the committee again for the opportunity to present here today.